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Gateways in the Asset Management Process Options Appraisal

Purpose and Scope

The formal Options Appraisal (OA) for a Local Authority provides an estimate of income and expenditure over longer term for the possible implementation options.

All landlords should undertake an ongoing appraisal of their options for the future management of their stock, eg for specific stock or areas, considering future funding requirements.

Timing/Timescales

Often three years from the start of Asset Management

Typical duration two to three years for formal OA, continuing appraisal typically 12 months, although the mechanical process may only take nine to twelve months.

Appraisal Brief

These issues should be considered as part of the appraisal process:

Status of current stock, for example:

• Tenure type
  • Leasehold
  • Tenanted
  • Shared ownership
  • Right to buy (RTB)
• Utilisation, by tenure type/status
• Void rate, by tenure type/status
• Occupancy, by tenure type/status
• Turnover, by tenure type/status
• Demand, by tenure type/status

Financial exercise:

• Rent receipts
• Bad debts
• Cost of improvement
• Running costs, eg responsive maintenance

Funding options:

• 30 year cash flow models
• DH funding only
• Stop gap

Formal implementation options:

• ALMO
• LSVT
• HA
• PFI
• Retention of stock
• Other options

General aspirations for particular local aspects, eg care homes, tower blocks:

• Invest early
• Retention of stock
• Demolition
• Etc

Outputs of the formal OA:

• Report with recommendations
• Business case/planning options
• Soft/hard deliverables
• Warranty for the study

Other Gateway Items

Assessment criteria for potential consultant:

• Experience of the preferred implementation routes, eg PFI

Likely stakeholder aspirations

• Arrangements for presentation of outputs to stakeholders (consider including in brief, if any)
• Valuation assessment (including ALMO and retention) by end of OA